Subsidiary Books in Accounting

Subsidiary books are a set of specialized accounting books that are used to record specific types of transactions. These books serve as a subsidiary or auxiliary to the main journal. They are maintained to facilitate the systematic recording of similar transactions in a convenient and organized manner. The use of subsidiary books helps to simplify the bookkeeping process and enhance the efficiency of recording and retrieving information.

Types of Subsidiary Books

1. Cash Book: The cash book is used to record all cash transactions, including cash receipts and cash payments. It acts as a subsidiary book for cash transactions and provides a summary of cash inflows and outflows.

2. Sales Day Book: The sales day book is used to record all credit sales made by the business. It includes details such as the date of the sale, the name of the customer, the invoice number, and the amount of the sale.

3. Purchases Day Book: The purchases day book is used to record all credit purchases made by the business. It includes details such as the date of the purchase, the name of the supplier, the invoice number, and the amount of the purchase.

4. Sales Return Book: The sales return book is used to record all goods returned by customers. It includes details such as the date of the return, the name of the customer, the invoice number, and the value of the returned goods.

5. Purchases Return Book: The purchases return book is used to record all goods returned to suppliers. It includes details such as the date of the return, the name of the supplier, the invoice number, and the value of the returned goods.

6. Bills Receivable Book: The bills receivable book is used to record all bills received by the business from its debtors. It includes details such as the date of the bill, the name of the debtor, the amount of the bill, and the due date.

7. Bills Payable Book: The bills payable book is used to record all bills issued by the business to its creditors. It includes details such as the date of the bill, the name of the creditor, the amount of the bill, and the due date.

Advantages of Subsidiary Books

- Systematic recording: Subsidiary books allow for the systematic recording of similar transactions, making it easier to manage and analyze financial information.

- Time-saving: By recording transactions in specialized books, the process of posting them to the general ledger is simplified and time-saving.

- Accuracy: Subsidiary books help to minimize errors and ensure accuracy in recording transactions, as each book is dedicated to a specific type of transaction.

- Easy reference: Subsidiary books provide a consolidated record of transactions, making it convenient to refer to specific details when needed.

- Analysis and decision-making: The use of subsidiary books enables businesses to analyze transaction patterns, identify trends, and make informed decisions based on the recorded information.

In conclusion, subsidiary books play a crucial role in maintaining organized and accurate accounting records. They simplify the recording process, enhance efficiency, and provide a consolidated summary of specific types of transactions. By utilizing subsidiary books, businesses can streamline their accounting procedures and make informed decisions based on the analyzed financial information.

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